Says He Imposed More Taxes Even after Supreme Court Ruling
By Hank Russell
A month after achieving a legal win, General Letitia James led a group of 21 attorneys general and two governors’ offices in a lawsuit against President Donald Trump in the United States Court of International Trade.
As previously reported in Long Island Life & Politics, on February 20, the Court ruled 6-3 that sweeping tariffs imposed by the Trump administration under the International Emergency Economic Powers Act (IEEPA) violate the law. But shortly after the Supreme Court ruled in favor of James and the coalition, the president issued a new proclamation imposing tariffs on a range of countries and goods using Section 122 of the Trade Act of 1974.
Joining James in filing this lawsuit are the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, North Carolina, Rhode Island, Oregon, Vermont, Virginia, Washington, Wisconsin, and the governors of Kentucky and Pennsylvania.
“Were the President to find the endless tariff authority he seeks based only on his decision to conflate trade deficits alone with balance of payments deficits, he would be seizing power from Congress unconstitutionally,” the lawsuit stated. “Because these tariffs are unlawful, this Court should declare that they are not in force, enjoin the Defendant agencies and officers from enforcing them, and vacate the agency actions implementing them.”
James and the coalition argue in their latest lawsuit that these new tariffs are illegal because the president does not have the power to impose them. They also claim that the tariffs do not meet the requirements of Section 122 and violate the Constitution’s protection of the separation of powers. The suit looks to declare the tariffs imposed under Section 122 unlawful and order the federal government to issue refunds to states for the tariff costs that they paid as a result of the president’s proclamation.
“Once again, President Trump is ignoring the law and the Constitution to effectively raise taxes on consumers and small businesses,” James said. “After the Supreme Court rejected his first attempt to impose sweeping tariffs, the president is causing more economic chaos and expecting Americans to foot the bill. These tariffs will only drive up the cost of living, and I will continue to uphold the rule of law to protect New Yorkers.”
“The Trump administration’s illegal and reckless tariff policies continue to weigh on the businesses, farmers, and consumers across New York State, hindering the state’s overall economy,” Governor Kathy Hochul added.
LILP also reported that Hochul says the Trump administration owes the state $13.5 billion from the economic damage caused by the tariffs.Hochul made this announcement following the recent Supreme Court decision overturning the president’s tariffs. Based on estimates by the Yale Budget Lab, the average New York household has faced an estimated $1,751 in added costs due to tariffs since they were enacted last year, according to Hochul.
“It is time the federal government refunds the $13.5 billion taken from hardworking New Yorkers and end the economic chaos that these unlawful taxes have created,” the governor said. “I applaud Attorney General James for fighting for New Yorkers and look forward to continuing to work with her to put money back into the pockets of our families and workers.”
The lawsuit contends that no president has ever attempted to impose tariffs using Section 122. The law is specifically designed to allow limited tariffs to address certain monetary crises, including a significant “balance of payments” deficit – a distinct economic problem that can occur in a fixed-rate exchange system like the gold standard. However, the U.S. abandoned such an exchange system half a century ago. As a result, balance of payments problems no longer occur. Attorney General James and the coalition assert in their lawsuit that the president’s primary rationale for imposing these tariffs – the country’s trade deficit – is not a legitimate reason for imposing tariffs under Section 122. In fact, the administration admitted during the lawsuit against the president’s IEEPA tariffs that trade deficits “are conceptually distinct from balance of payments deficits.”
In addition, the president’s tariffs violate other requirements in Section 122, said James and the coalition. The law requires new tariffs to be applied consistently in several ways, including that they are not applied discriminatorily. Yet the new tariffs exempt many goods from Canada, Mexico, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua. They also include 84 pages of specific product exceptions.
In response, White House spokesperson Kush Desai said, “The President is using his authority granted by Congress to address fundamental international payments problems and to deal with our country’s large and serious balance-of-payments deficits. The Administration will vigorously defend the President’s action in court.”